Correct Answer: D. compare a country's growth rate with that of another over a period of time

Correct Answer: A. demand for increased special deposit

Correct Answer: B. imperfect market

Explanation

Price fluctuation refers to the frequents rise and fall of commodity prices in the market as a result of changes in the market situations. price fluctuation can be seasonal whereby prices of commodities changes during certain season of the year due to the increase in supply and demand. It is a feature of imperfect market where buyers and sellers can influence prices and production

Correct Answer: D. frequent strikes and lock-outs

Correct Answer: C. birth rate minus the death rate

Explanation

(a) Perfect competition:

(i) Large numbers of buyers and sellers such that no single seller or buyer can influence the price

(ii) Free entry and exit such that there is no barrier to entering or leaving the market.

(iii) Common price rules the market because price is fixed by the forces of demand and supply

(iv) Homogenous product (the same product) is sold by all sellers in the market

(v) There is perfect knowledge about prices prevailing in the market by both sellers and buyers.

(vi) Absence of government control. Government does not interfere in the activities of the market

(vii) No preferential treatment as sellers and buyers are indifferent as to whom they buy from or sell to.

(viii) Identical cost conditions exist as there are no transport costs that may influence price.

(ix) There is perfect mobility of factors of production since producers can easily move from one line of production to another without hindrance.

Monopolistic competition:

(i) There is a large number of sellers but each seller chooses his own market strategy.

(ii) Products are differentiated by branding, packaging, weight so that they are not homogenous.

(iii) Any firm can enter with a variety, or exit if it is not making profits

(iv) There is a large number of buyers with their own preferences

(v) Different prices rule the market i.e. each firm is a price maker controlling a portion of the market

(vi) It faces a downward- sloping demand curve.

(b)i. A firm is a price taker if its output is only a small fraction of the total output of the industry and thereby exerts no significant control over the price of the product in the market i.e. if it is a perfect competitor. OR The price is determined by the forces of demand and supply.

ii. A firm is a price maker if it controls the entire output or a major part of the output of the industry i.e. if it is a monopolist or a monopolistic competitor. Such a firm has considerable control over the price of the product in the market.

(c)i. Acts of parliament - This is power conferred by law on a firm to be the sole producer or supplier of a particular commodity

ii. Copyright - This is a legal right granted to the producer or seller of a book, play, film or song to be the sole seller for a specific period of time.

iii. Natural monopoly- A situation which makes a firm (because such a firm owns a unique raw material, technology of some other factor), supply a market's entire demand for a good or service, at a price lower than two or more firms can e.g. the utility firms

iv. Cartel - A cartel is an agreement between two or more producers of the same commodity to regulate the production and sale of the product with a view to obtain dominance in the market e.g OPEC.

Correct Answer: A. increasing relative costs

Correct Answer: B) The alternative cost involved when the opportunity of buying the commodity is mixed

Explanation

The question is asking about the definition of the real cost of a commodity. The real cost refers to the actual cost of a commodity, which is not just the market price. Option A states that the real cost is the cost of the alternative that has to be sacrificed for it. This means that if you choose to buy one thing, you have to give up the opportunity to buy another thing. Option B is the correct answer, which states that the real cost is the alternative cost involved when the opportunity of buying the commodity is mixed. This means that the real cost is the cost of the next best alternative that you have to give up in order to buy the commodity.

Option C states that the real cost is its market price. This is not entirely correct because the market price is just one aspect of the real cost. Option D states that the real cost is the alternative that has to be forgone in order to purchase it. This is similar to Option A, but it is not specific enough because it does not mention the opportunity cost.

Understanding the concept of opportunity cost is essential in economics. Opportunity cost refers to the value of the next best alternative that must be given up in order to engage in an activity. For example, if you choose to attend a football game, the opportunity cost is the value of the next best alternative use of your time, such as studying or working.

In summary, the real cost of a commodity is the alternative cost involved when the opportunity of buying the commodity is mixed. This means that the real cost is the cost of the next best alternative that you have to give up in order to buy the commodity.

Correct Answer: C. lending to borrowers

Correct Answer: B. it has the right to draw on state funds for capital investment